Total commercial property transaction volume through the first nine months of 2013 was $239 billion, up 27% from the same period of 2012 according to Real Capital Analytics. Sales in the multifamily sector, which have accounted for the largest share of overall transaction volume and price growth over the past few years, continued to slow in the third quarter, as investors focused on development or other product types, particularly office and industrial.
According to CBRE Econometric Advisors, vacancy rates for most of the major property sectors showed improvement during the third quarter, as follows:
Multifamily – In the third quarter of 2013, the national vacancy rate for multifamily properties remained at 4.6%, the same level as the quarter prior and up 10 bps from the same period in 2012. CBRE-EA expects the vacancy rate to remain the same or increase slightly going forward, as completion totals approach historical averages and the housing market continues its recovery. As in previous quarters, the strongest rent growth in the third quarter occurred in large west coast cities.
Retail – The national retail vacancy rate fell slightly, to 12.2%, in the third quarter 2013. Although this rate represents a 70 bps improvement from the same period in 2012, CBRE-EA expected a greater improvement based on the positive momentum observed in the first two quarters of 2013. Retailers appear to be waiting to see consumer behavior during the holiday season before expanding further.
Office – As of September 30, 2013, the national office vacancy level was 15.1%, down 10 basis points from the prior quarter and 50 basis points in the past year. The suburban office vacancy rate fell for the sixth consecutive quarter, while the downtown rate rose 10 bps in the third quarter, largely due to downsizing by financial and other professional services firms in Manhattan.
Industrial – The national industrial vacancy level fell 30 basis points in the third quarter, to 11.7%. The industrial sector has now posted 13 straight quarters of vacancy decreases, and the recovery continues to be broad based, with 42 out of 60 markets experiencing decreased vacancy in the third quarter.